Stocks Drop on Earnings, Economic Worries
The Dow medium slips below 8,000 considered in the state of investors digest again earnings news from Google and GE and continue to worry about the economy
By Karyn McCormack
Stocks moved broadly lower Friday amid more earnings reports and distressing news about Britain’s economy. Google’s (GOOG) results were mixed, while General Electric (GE) reported lower earnings and warned well-nigh challenging economic terms.
Worries touching how to lift the U.S. economy from recession also continue to weigh without interruption the markets. Goldman Sachs says prelusory estimates import that of the $825 billion Congress is considering for economic encouragement, only $250 billion will make it into the economy in the current calendar year. Goldman says “these estimates highlight the political and practical challenges in enacting an effective financial bundle, particularly for 2009.”
In other news, Britain has fallen into its worst recession since 1980, after a report showed a 1.5% decline in Britain’s fourth quarter GDP.
The dollar was up as the British pound sank. Treasuries and gold were up in a flight to safety. Oil futures moved lower.
On Friday encircling 12:10 pm ET, the 30-stock Dow Jones industrial average fell 134.04 points, or 1.65%, to 7,988.76. The broader S&P 500 index lost 6.17 points, or 0.75%, to 821.33. The tech-heavy Nasdaq composite was holding up better, by the index edging up 0.91 point, or 0.06%, to 1,466.40.
There was no U.S. housekeeping news today to stir the pot ahead of next week’s Federal Reserve meeting.
Among stocks in the news Friday, Pfizer (PFE) is in talks to acquire rival drug maker Wyeth (WYE) in a deal that could be valued at more than $60 billion, according to the Wall Street Journal.
Google (GOOG) posted $5.10 (non-GAAP), vs. $3.79 a year ago, fourth quarter EPS on 18% return arise. It plans to offer employees a voluntary, one-for-one stock option exchange.
General Electric (GE) reported $0.36, vs. $0.68 a year ago, fourth quarter EPS on 4.8% revenue drop. The company notes results include $1.5 billion of after-tax restructuring and other charges, including increased reserves in current environment, which are on high the company’s original proposal; says restructuring will lower costs for 2009 and on the other side of. GE says it’session committed to its dividend plan for $1.24 per contingent as antidote to the year.
Capital One Financial (COF) posted $3.67 fourth quarter loss from continuing operations, vs. $0.85 EPS, on 19% total income decline. COF recognized $810.9 million non-cash impairment of goodwill in conjunction with its revised outlook according to its Auto Finance profession. S&P Ratings Services says it revised its outlooks on COF to negative from stable, based forward the firm’s lower profitability as the weak phase of consumer credit cycle elevated credit losses on loans.
Advanced Micro Devices (AMD) reported $2.32 fourth quarter loss from continuing operations forward 33% revenue decline. The results for continuing operations include an inauspicious press close together of $996 million, or $1.64 per share. Given common macroeconomic conditions, very limited conspicuousness and continued corrections in the supply chain, AMD expects first place return to decrease sequentially.
Xerox (XRX) instructed breakeven, vs. $0.41, fourth quarter EPS on 10% revenue drop. Posts $0.30 fourth quarter adjusted EPS. Street was looking for $0.33-$0.34. Cites continued weakening economy, rapid devise ways and means in exchange rates. Sees $0.16-$0.20 first quarter EPS.
In foreign markets, stocks in London, Frankfurt and Paris stocks were mercantile lower. In Tokyo, public securities fell 3.81%, at the same time that the mart in Hong Kong savage 0.63% and Shanghai stocks fell 0.71%.
Original text: http://www.businessweek.com/investor/content/jan2009/pi20090123_103027.htm?campaign_id=rss_null
